Professional Documents
Culture Documents
SIP Report On 6TH Semister
SIP Report On 6TH Semister
Submitted To:
Submitted By:
1
DECLARATION
I also declare that the work undertaken by me is original and has not been
copied from any sources. I further declare that the information presented in
this project is true and original knowledge and has not been submitted to
MILE or any other Institute for any examination.
Signature of Student:
PRN: 20170209060109
Date:
2
CERTIFICATE
This is to certify that Mr. Amit Giri, studying in the second year of POST
GRADUATE DIPLOMA IN MANAGEMENT (PGDM) at Management
Institute of Leadership and Excellence, Wagholi, Pune, has completed the
Dissertation Project titled “Study of Business Model of OYO Room” as a part
of the course requirement of POST GRADUATE DIPLOMA IN
MANAGEMENT (PGDM) Program.
Signature:
Date:
3
ACKNOWLEDGEMENT
Last but not least, I would like to thank my family friends and other who
extended their helping hands to prepare this report.
Thanks to Almighty God, for giving me enough strength to prepare and submit
this report.
Signature:
Name:
Date:
4
Executive Summary
5
Table of Content
Page no
A. Certificate 04
B. Acknowledgement 03
C. Executive Summery 05
Introduction 07 - 16
Literature Review 17 - 18
S.W.O.T Analysis 19
Research Methodology 20
Limitation 21
Finding 25
Annexure 31
Bibliography 36
6
Chapter.1
1. Introduction
1.1 ABOUT OYO Rooms
OYO Rooms is India’s fastest growing branded network of budget hotels
founded by young entrepreneur Mr. Ritesh Agarwal on 2013. Within a short
span of time, OYO Rooms currently operating in more than 100 Indian cities
including Delhi, Gurgaon, Mumbai, Bangalore, Hyderabad, Goa, Chennai,
Kolkata are few to name. Similarly, OYO has been trying to be present in
major Metros, Regional hubs, leisure destinations and pilgrimage towns. OYO
Rooms provides standardized hotel rooms with features such as an air-
conditioned room, complimentary breakfast and Wi-Fi with 24x7 customer
service support. Guests can use the OYO Rooms App for booking rooms on
the go. They can also order beverages and request room service through the
app. Hotel owners who partner with OYO Rooms are connected via world’s
first tablet based property management App and become part of the OYO
brand. OYO Rooms, commonly known as OYO, is an Indian hotel brand that
owns and operates as well as aggregates standardized hotel rooms. It currently
operates in more than 200 Indian cities and in Malaysia.
7
1.2 Service Provided by OYO
Service include in OYO Business model are :-
Hotel Rooms
Oyo’s earlier strategy was to book a part of the hotels’ inventory, to maintain
it as per the quality standards, and to hold it captive exclusively for Oyo
customers. That is, they used to lease some rooms every month and provide
them to their own customers at profits.
The only thing that has changed is that the rooms are now not leased but
operated as OYO Rooms franchise. Since the hotels and place owners act as
the franchisee, they are bound to operate as per the pre-determined standards.
The company even offers plans where it runs the place instead of the hotel
staff or owner.
OYO Flagship.
The partners used to book their own hotels when they used to see fewer prices
on the OYO’s platform and this became malpractice benefiting the partners
while burning holes in Oyo’s pockets. To curb this, and to expand the
business, Oyo Rooms has started leasing of hotels and places where it has the
full control over the day-to-day operations of these establishments.
8
OYO Townhouse.
The company has recently launched the Oyo Townhouse to hone its value
proposition and stand out of the competition when it comes to standardized
hospitality. Oyo Townhouse is based on the needs of the millennial traveler.
These hotels are planned and built based on the needs and wants of the
millennials. They have –
a) Smarter Rooms
b) Smarter Spaces
c) Smarter Menus
24 x 7 Kitchen which lets you orders from the mobile application. and many
more smart services.
d) Studio Stays
Apart from providing hotel rooms, Oyo Rooms also provides fully furnished
rooms and flats for long stays like internships, corporate stays, etc. The
rooms/flats can be rented on single occupancy as well as on twin sharing basis
as well (other provisions are also applicable). Rents are paid monthly.
Commission (take-up rate) is charged from the owners if the customer comes
through Oyo rooms.
Just like studio stays. There are many family functions(weddings, parties) as
well as corporate functions (seminars, meetings, parties) which involve hotel
rooms for their guests to stay for long. This service is also provided by Oyo.
9
f) Commercial Places
Oyo has expanded its branches in the commercial places domain as well. Now
the customers can even book office spaces on Oyo as well.
g) Oyo Wizard
The company has also launched a subscription model where the subscribers
get exclusive discounts, deals, and cashback offers.
10
1.3 Evaluation and Funding
The journey of OYO Rooms was started when Ritesh Agarwal dropped a
college and launched his first start‐up Oravel Stays Pvt. Ltd. in the year
2012. Oravel was designed as a platform to enable listing and booking of
budget accommodation. Being an enthusiastic entrepreneur, he soon realized
that the budget hospitality sector lacked predictability. Therefore, he converted
Oravel to OYO Rooms in 2013 with an aim of offering affordable and
standardized accommodation.
11
1.4 Growth
OYO Rooms started with one city and one hotel (OYO Rooms Huda City
Centre) in Gurgaon in May 2013 and has seen a tremendous growth. With
whopping budget hotels under its branded network across the India, OYO
Rooms ‘growth has been nothing short of phenomenal, and the rapid
expansion has meant that the funded start-up now owns India’s largest
branded network of hotels
As a leader, OYO Rooms has created a new paradigm in the hospitality sector
through an asset-light managed marketplace model. This innovation coupled
with sound execution has been recognized by several national and
international accolades including TIE Lummis Business Excellence Awards,
India International Travel Mart Award and Lufthansa ET Now Runway to
Success Award. Now the company has more than 1000 employees including
10-20 people from IIMs, more than 200 people from IITs, HBS and Ivy.
12
Detail of OYO Rooms’ Properties
Year Number of Property (Hotels)
2013 January 1 Property
2013 June 3 Properties
2014 July 13 Properties
2015 August 2000+ Properties
2016 June 5500 Properties
2017August 7000 Properties
13
1.5 Revenue Model
Step1. Oyo rooms books a part of the hotels inventory by paying monthly rent
in advance at discounts (Expenses)
Step2. These hotels are put to match the standardized quality like free Wi-Fi,
clean toilets etc. (expenses)
Step3. Users buy these from at a predetermined price (revenue)
The expenses also include the heavy expenses on promotional activities to
increase the brand quality among the users as well as the remuneration of the
employees. It provides heavy discounts to the customers. These discounts
often results in prices which are lesser than the cost price of these hotels and
results in losses.
(The revenue model has also transformed as the business model changed from
aggregator to franchise. Earlier the brand used to lease hotels at a
predetermined price and offered them to the users at a take-up rate. This has
been changed to a commission based revenue model.
Oyo rooms charges a commission of 22% from its hotel partners. However,
this commission does vary according to the services provided by the brand.)
14
1.6 BUSINESS MODEL of OYO Rooms:
OYO Rooms is an aggregator that provides a market place for online hotel
booking similar to Uber, which provides a marketplace for online cab
booking. Started in the year 2013, OYO is turning into India’s largest chain of
hotels. It has a very simple business model where it adopts hotels, get them to
follow certain basic standards of services, features, staff, pricing and security
and then list them on its web portal and sells them under its brand, earning a
part of the profit from the deal. Currently the company is following invest and
expand mode. Till now it has received funding from the big firms like Sequoia
and is estimated to be worth $400 million after its latest round of funding in
August this year, where it received $100 million.
OYO’s asset free business model has now challenged the capital heavy hotel
industry. The company does not own any of the properties listed on its site. It
only invests in marketing and quality improvements for the hotels under its
banner. The model provides a win-win situation for both the small budget
hotels and owners of spare properties, who do not have enough capacity,
network and knowledge of smart marketing. OYO has helped them increase
their bookings by more than 100% thereby improving their yields.
15
1.7 Unique Selling Proposition of OYO Rooms.
Finding hotels in India is not a big problem; the major issue is the trust factor
and predictability of services. OYO founder, Ritesh Aggarwal, capitalized on
this basic need by providing standardized hotel rooms across the country. The
complete model of hotel industry is based on consumer experience, and with
the beautiful amalgamation of technology and quality control mechanisms has
improved customer experience even at economical rates. The complete model
is designed keeping in view the consumer experience, right from booking to
finding hotel to standardized services to high technology room service option.
To further enhance the customer experience, company has Ked with Airtel to
provide its customers a world class in-room internet and TV viewing
experience at no additional cost.
OYO rooms have also started two new sub-divisions to increase its hold on the
market:
OYO Premium - Moving from the budget room segment, company has also
started premium room service in metro cities to increase its customer base.
OYO premium rooms will cater those business travelers or families who are
looking for premium services and are ready to shell out few extra bucks for
higher comfort.
OYO SMART: Introducing this concept which includes fully ownership of
reservations by OYO whether it is by normal walk-in, any OTA like MMT,
GOIBIBO, CLEARTRIP, and YATRA.COM.
16
Chapter 2
2.1 Review of Literature :
The hotel industry involves high degree of interaction between employees &
guests and so provides many opportunities for service failures to occur.
Service quality issues have been of concern to researchers for close to twenty
years & no. of projects focused on hospitality industry. For example, McColl-
Kennedy & White (1997), Pizam & Ellis (1999) considered consumer
satisfaction in hotels & mismatch between expectations & perceptions of
Service Quality. In terms of measurement O’ Neill (1996), used SERVQUAL
(Parasuraman et al., 1988) in hotels in no0rthern Ireland used it in hotels in
Korea. Alternative measurement tools for the hospitality industry were
developed by Wong et al. (1999) for hotels in Australia (HOLSERV) & by
Knutson et al. (1991) (LODGSERV).
Dissatisfaction;
A decline in customer confidence;
Negative word-of-mouth Behavior;
Loss of revenue & increased costs; and
A decrease in Employee morale & performance
17
2.3 Service Recovery:
If service failures do occur, then what can service providers do to recover?
“Service recovery involves those actions designed to resolve problems, alter
negative attitudes of dis-satisfied customers and to ultimately retain this
customers.” and “It includes situations in which a service failures occur but no
complaint id lodged by customers.”
Apology
Correction
Compensation
Follow-up
Acknowledgement
Explanation
Exceptional treatment; and
Managerial intervention
18
Chapter 3
3.1 SWOT ANALYSIS:
STRENGHTS:
WEAKNESS:
OPPORTUNITIES:
THREATS:
19
Chapter 4
1 RESEARCH PROCESS:
Before embarking on the details of research methodology and
techniques, it seems appropriate to present a brief overview of
the research process. Research process consists of series of
actions or steps necessary to effectively carry out research and
the desired sequencing of these steps.
Research Process:-
20
4.2 Limitation:
The limitations are as follows:-
1. Some customers refuse to co-operate and do not
disclose their Genuine opinion.
2. Customer information is highly confidential, so
organization doesn’t disclose it properly.
3. Respondent’s answers might have influence or bias.
4. Information is collected from the customers and dealers
only.
5. Meeting to the Guests is tough job, because they are
very busy.
21
Chapter 5
5.1 Data Analysis & Interpretation
120
100
80
Tootal Feedback Count
UN- Happy Count
60
UN- Happy %
Delight Count
40 Delight %
20
0
WEEK 1 WEEK 2
22
140
120
100
20
0
WEEK 1
WEEK 2
WEEK 3
Week 4
23
120
100
80
Total Feed back Count
Unhapy Count
60
Unhappy %
40 Delight Count
Delight %
20
Delight %
Delight Count
Unhappy %
0 Unhapy Count
Total Feed back Count
24
5.2 Finding
3. We found that maintaining good relations with all internal & external
stakeholders helps in smooth conductions of Operations.
25
Chapter 6
RESPONSE NO’
OYO ROOM 58
MMT 42
TOTAL 100
OYO Room 58%
MMT 42%
TOTAL 100%
Response
42
YES
58
NO
Interpretation: From the above graph it can be stated that 68% of customer’s
think of OYO Rooms while reservations for hotels.
26
Q2. Have you ever faced troubles with finding hotels?
RESPONSES NO’
YES 78
NO 22
TOTAL 100
YES 78%
NO 22%
TOTAL 100%
Responses
22%
YES
78% NO
Interpretation: From the above graph it can be stated that 78% of customers
are having troubles with finding a budget friendly hotel.
27
Q3.Have you ever heard of OYO rooms?
RESPONSE NO’S
YES 85
NO 15
Total 100
YES 85%
NO 15%
Total 100%
Response
15%
YES
NO
85%
Interpretation: The above graph depicts the opinion of the consumers, 85%
of them heard of OYO rooms and 15% of them have not heard.
28
Q4. How You Come to Know about OYO Rooms?
Response NO’
Digital Advertisement 18
Friends Told 82
Total 100
Digital Advertisement 18%
Friends Told 82%
Total 100%
Response
18%
Digital Advertisement
Interpretation: The above graph depicts the opinion of the consumers, 18%
of them heard of OYO rooms from Digital Advertisement and 82% of them
heard from friends or others.
29
Q5. Would you download an app for booking a room?
Response NO’s
YES 31
NO 69
Total 100
Yes 39%
No 69%
Total 100%
Response
31%
Yes
69% NO
Interpretation: From the above graph 69% people would not download an
app 31% of them would.
30
Chapter 7
7.1 ANNEXURE
Q-1 While Thinking of Reservation for HOTELS, Which OTA (online travel
agent) comes in your mind
1) OYO ROOMS 2) Make MY TRIP
1) YES 2) NO
31
Chapter 8
OYO NEWS
https://economictimes.indiatimes.com/topic/OYO-
Rooms
1) OYO forays into Japan with a housing rental service
the service, called OYO Life, will be available from the beginning of
next month and will be offered by OYO Technology & Hospitality
Company, Japan, the joint venture entity between OYO and Yahoo
Japan.
Read more at:
//economictimes.indiatimes.com/articleshow/68113323.cms?utm_source=contentofinterest
&utm_medium=text&utm_campaign=cppst
32
4) In FY18, Oyo India ops revenue jumps three fold
The firm has also projected a revenue of almost Rs 1,500 crore for the
current fiscal which, if met, will again be a three-fold jump over the
previous financial year
Read more at:
//economictimes.indiatimes.com/articleshow/67844216.cms?utm_source=contentofinterest
&utm_medium=text&utm_campaign=cppst.
33
Chapter 9
Customer Feedback
1) Nidhi
“It was great pleasure to stay with oyo premium rooms . Ambience and other
facilities was good but the room was not according as shown in oyo site.Other
than that everything was perfect and meet our expectation.”
2) vivek24
“we booked OYO Yuvraj delux hotel for 5th january. upon reaching the hotel
we were denied accomodation even after having confirmed booking. there
were few other people also who were denied accomodation even after having
confirmed booking throigh OYO.
The hotel was selling the rooms for higher rates and denying accomodation to
us . this is clear cheating and giving trouble to cjstomers with confirmed
booking. the same thing happened earlier also in delhi.
If oyo does not stop cheating like this they will loose customer base soon.”
3) Hambirrao M
“I have been associated with OYO brand for quite a long time now and must
say. The quality of a brand is detoring to the 3rd class level. I believe it take
lot of hard work to built a brand but very difficult to maintain the standard.
I had booked 1 room on 29th Dec because my brother was reaching early
morning at 5 Am. It took him 1.5 hrs to locate the hotel coz no one was
answering at hotel or at OYO. Even local people did knew the hotel coz its
without oyo brand board. Karishma Home's written on A4 size paper (look
that your standards). On 30th we checked in 3 Rooms and imidiatly I called on
9313931393 number for my feedback the after listening to my feedback that
executive transferred my call to Hotel owner or manager and OYO Guest
Relation Manager ( Rama Gupta) I was promised the problem will be solved.
Purely Third class service..... Station Lodge provide much better services then
OYO I believe then. No laundry service, Worst bathroom quality “
34
4) Shinoj K
“Never trust the OYO app. I have booked the rooms on 09 November 2018 in
Golden Square Hotel Apartments in Dubai through app by seeing the photos
they have added in the app, but it’s entirely different and old. When i asked
about the photos in the reception they said they have informed about this issue
to OYO room long back still they haven't update. I think they are purposely
cheating the customer. If they update the actual no one will ever book this
rooms. I will never suggest OYO rooms to any of my colleges”
5) Vasundhara R
“When you have a night halt at a clean room, with good service it makes
business visits convenient. OYO Rooms are a great concept and GK one had a
very helpful service. The breakfast delivered in the room was good quality!
Overall great experience.”
6) Arjun J
“Worst service, unexpected from you guys Will never suggest an OYO room to
any of my colleges, You guys are cheaters! I have almost called you guys 100
times but still not recieved any solution. Shame on ur services. U guys not
even deserve 1 star”
7) Vidhyashankar K
“The inside of the hotel is a very different revelation to the outside elevation
and facade. It is a very good hotel with polite and courteous staff. The
complimentary breakfast was excellent. I needed a working refrigerator and
the one provided worked perfectly. The AC worked fine with no smell. The
bathroom was neat and tidy. Clothes hangers in the cupboards were plenty.
The bellboys were always available for any request. Definitely
recommended.”
https://www.tripadvisor.in/Hotel_Review-g304551-d7908136-Reviews-or5-
OYO_Rooms_GK2-
New_Delhi_National_Capital_Territory_of_Delhi.html#REVIEWS
35
Chapter10
BIBLOGRAPHY
BOOK REFERENCE
Referred Books:-
Principles of Marketing- Philips Kotler
WEBSITES:-
https://www.oyorooms.com/blog/
https://en.wikipedia.org/wiki/OYO_Rooms
https://www.slideshare.net/
https://www.scribd.com/
http://crs.oyorooms.com/users/sign_in
http://Unhappy_Dashboard_docs.google.com
36